Property giant Derwent in £700m bet on London as firms defy Brexit
Property giant Derwent London on Thursday revealed remarkable confidence in the capital as it agreed to start work on £700 million of new projects following first-half growth.
Chief executive John Burns said his FTSE 250 firm will start work next year on a £500 million redevelopment of the historic Astoria music venue, creating 285,000 square feet of offices, shops and a theatre on the corner of Oxford Street and Charing Cross Road.
It will also start construction on up to £200 million of offices in Shoreditch.
Its commitment to invest comes after the value of Derwent’s property empire rose 1.3% to £5 billion in the six months to June 30.
Net rental income increased 1.6% to £80.6 million and it agreed a number of new office lettings, including to Sony Pictures in Paddington.
Burns told the Standard: “The proof is in the pudding. We have done £65 million of office lettings since the Brexit vote. Businesses still want to be in London.” He added that the firm would benefit when Crossrail opens.
Derwent acknowledged the retail bloodbath that has seen a number of chains axe sites, but said that represents only a small part of the business.
It is declaring an interim dividend of 19.1p per share, up 10.2%.
Elsewhere on the mid-cap index, property agent Savills posted an 18% drop in first-half pre-tax profits to £26.7 million, after making a number of acquisitions.
Revenues edged up 2% to £727.8 million. Growth came despite a 7% fall in the number of residential properties sold in London.
The firm was upbeat about the London office leasing and investment market.
Shares in Derwent dipped 7.2p to 3108.8p, and Savills was down 29p to 835p.
